The guy who invented it tested it at various speeds and angles: https://en.wikipedia.org/wiki/Wire_strike_protection_system. There are also numerous documented cases of these working as intended in the NTSB database. The FAA did a study and found that wire strike cutters significantly reduced fatalities https://skybrary.aero/sites/default/files/bookshelf/3288.pdf

So no, not a dumb idea according to the FAA's data backed study, the US military, and the people that operate helicopters.

It does protect, and is already certified and installed on many copters. Still, it's an emergency device, last resort, like parachutes on some small airplanes.

Multiple cable cutters are installed on every military helicopter